A Trade Update

The Greeting Card Association (GCA) has been engaged in opposing expansion of the list of products imported from China subject to proposed tariffs to include greeting cards including testimony by GCA President, George White to the United States Trade Representative (USTR) in June of this year.

While it was announced shortly after the hearing that negotiations between the U.S. and China would resume and action on further tariffs postponed, it appears that the latest round of negotiations completed on July 31, 2019 were not as productive as hoped. On Thursday August 1, 2019, the President announced via Twitter that he would be imposing a “small additional tariff” of 10 percent on the remaining $300 billion worth of goods from China beginning on September 1, 2019.

While the tariff amount is less than the 25 percent originally proposed, it will still represent an additional burden on greeting card publishers who rely on China as a source of production. However, opportunities remain for mitigating the impact. First, the USTR is continuing to evaluate the testimony urging the removal of greeting cards from the final list of products subject to new tariffs. That decision could come in the fall and any tariffs paid prior to the decision would be refunded if greeting cards are removed from the list.

Secondly, there is a process that would permit greeting card producers to request a 1-year exclusion for their products should greeting cards not be exempted. The process for requesting such exclusions would begin in December once the process for evaluating exclusion requests for the third list of products is completed.

Meanwhile, negotiations between the U.S. and China are scheduled to continue with the hope that a satisfactory agreement could be reached resulting in the elimination of all tariffs.